Finance Minister Enoch Godongwana said yesterday that the government has done everything it could in negotiations to avoid the pending strike among public sector employees, which is set to start next week.
In a press conference with journalists ahead of his 2022 Medium-Term Budget Policy Statement (MTBPS), Godongwana said talks between the government and trade unions reached a deadlock as the government offered a 3% wage hike while the unions are seeking 8%.
The Public Servants Association (PSA), which represents more than 235 000 public sector employees, and National Education, Health and Allied Workers’ Union (Nehawu) are preparing for a strike after some of their members rejected the government’s latest salary offer.
Public service members wish to down tools in protest against a lower-than-inflation proposed wage increase by the government.
“Any employer does anything possible to avoid a strike, and I think we have done all we could to do so,” Godongwana said.
Meanwhile, the government has reduced the medium-term compensation of employees’ baselines by more than R300 billion to stabilise public finance between the 2020 and 2021 budgets, according to Godongwana.
He said over the past several years, the government had taken steps to contain consolidated compensation costs, which accounted for 31.4% of consolidated expenditure in 2022/23 – down from 34.5% in 2019/20.
“Managing the wage bill is critical for ensuring sustainable public finances,” he said.
Over the past 15 years, the consolidated wage bill grew significantly, mostly as a result of above-inflation wage increases.
“In the context of slow economic growth, the growing wage bill began crowding out spending in other critical areas, including service delivery,” Godongwana said.
He said future wage negotiations would aim to strike a balance between remuneration increases and the need for additional staff in services such as education, health, and police.
Godongwana said in an effort to reduce the current remuneration inequality for employees performing similar tasks in different spheres of government, the Department of Public Service and Administration, working with the National Treasury and other national departments, was reviewing remuneration policies across the government.
“The aim is for the public sector, excluding state-owned companies, to move towards a single remuneration framework in line with the principles of fair, equitable, and sustainable remuneration.
“Remuneration practices have become misaligned because of a fragmented system. This is reflected in a similarly fragmented collective bargaining process in the public sector. In this regard, there are significant differences between the remuneration of senior managers in the public service and those in municipalities and public entities,” he said.
Godongwana said much of the rise in the consolidated wage bill since 2008/09 was the result of large increases in remuneration rather than in the number of people employed.
“Head counts in the government have increased by 0.2% on average per year, while salaries and wages have grown on average by 6.2% per year over the same period,” he said.
While head counts in national departments declined by an annual average rate of 1.3% between 2015/16 and 2021/22, spending increased by 4.9% over the same period.
“Police, defence, and correctional services account for the largest share of spending and head counts in national departments. Provincial head counts also declined between 2015/16 and 2018/19, but the numbers increased significantly in 2021/22 largely due to Covid-19-related appointments in health and education. Head counts and spending in both local government and national public entities increased significantly between 2015/16 and 2021/22,” he said.
Additional funding amounting to R43.6bn over the 2023 medium-term expenditure framework (MTEF) period has been made available to increase head counts, mainly in education, health and police.
“The allocation to police will allow the department to recruit nearly 5 000 officers annually over the 2023 MTEF period. Education and health will also be able to increase head counts,” he said.
Godongwana said over the medium term, the government would focus on increasing capacity in services such as education, health, and police and develop a single remuneration policy to guide remuneration decisions across different spheres and entities.
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